This is a tale of two real estate markets. 

It was the best of times.  It was the worst of times.

In one of these markets, the average home sold for $374,928 in February.  In the other, the average home sold for 36.5% less, or $238,132, in February.  The sold price per square foot was 31.2% in the second market than the first).

The first “market” we’re talking about here is the Sacramento County real estate market — the one that consists of all the homes that sold that we’re not short sales or bank foreclosures.  I like to call this one the Sacramento non-distressed market. 

The second “market” is also the Sacramento County real estate market, but consists only of the foreclosures.  I call this one the Sacramento foreclosure market.

Obviously the non-distressed market is quite a bit more expensive than the foreclosure market.  Part of this is a real discounting over non-REO sales, and part of it is due to the fact that, as a general rule, the cheaper neighborhoods have more foreclosures.  (There are at least two or three chicken-egg problems inherent in that, which we won’t go into now).

Fun Facts About the Two Markets

Fun Fact #1:
Most buyers think that banks who have foreclosure are “more willing to negotiate” on price than non-distressed sellers.  In fact, just the opposite is true.  The average foreclosure sold in February at a 4.1% discount off of the list price, while the average non-distressed property sold for a 4.8% discount off of list.  (Those poor foreclosure buyers had to be consent with a measly 31.2% discount in sold price per square foot).

Fun Fact #2:
The difference in price between the two markets seems to be “growing”, if the current batch of active listings is any indication.  In February, the difference in sold price between the non-distressed homes and the foreclosures was 31.2%.  In active inventory, on the other hand, the difference in list price per square foot for the two markets is 38.1%.

Fun Fact #3
Foreclosures and non-distressed properties that sold spent about the same amount of time on the market — 65 days for foreclosures versus 69 days for non-distressed sales.  Average days on market for active listings show a bigger discrepancy, at 72 days on market for the foreclosures versus 96 for the non-foreclosures.  (This is related to fun fact #2 if you think about it — banks are more willing to cut list prices if the homes just sit there).

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